EQUITY LIFESTYLE PROPERTIES, INC. (Exact Name of Registrant as - PDF document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________ FORM 10-Q _________________________________________________________ x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2017 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-11718 _________________________________________________________ EQUITY LIFESTYLE PROPERTIES, INC. (Exact Name of Registrant as Specified in Its Charter) _________________________________________________________ Maryland 36-3857664 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606 (Address of Principal Executive Offices) (Zip Code) (312) 279-1400 (Registrant’s Telephone Number, Including Area Code) _________________________________________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer x Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o Emerging growth company o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 87,005,128 shares of Common Stock as of July 24, 2017.

Equity LifeStyle Properties, Inc. Table of Contents Page Part I - Financial Information Item 1. Financial Statements Index To Financial Statements Consolidated Balance Sheets as of June 30, 2017 (unaudited) and December 31, 2016 3 Consolidated Statements of Income and Comprehensive Income for the quarters and six months ended June 30, 2017 and 2016 (unaudited) 4 Consolidated Statement of Changes in Equity for the six months ended June 30, 2017 (unaudited) 6 Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 (unaudited) 7 Notes to Consolidated Financial Statements 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18 Item 3. Quantitative and Qualitative Disclosures About Market Risk 33 Item 4. Controls and Procedures 33 Part II - Other Information Item 1. Legal Proceedings 34 Item 1A. Risk Factors 34 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34 Item 3. Defaults Upon Senior Securities 34 Item 4. Mine Safety Disclosure 34 Item 5. Other Information 34 Item 6. Exhibits 35 2

Equity LifeStyle Properties, Inc. Consolidated Balance Sheets As of June 30, 2017 and December 31, 2016 (amounts in thousands, except share and per share data) June 30, 2017 December 31, (unaudited) 2016 Assets Investment in real estate: Land $ $ 1,167,510 1,163,987 Land improvements 2,922,201 2,893,759 Buildings and other depreciable property 641,931 627,590 4,731,642 4,685,336 Accumulated depreciation (1,459,931) (1,399,531) Net investment in real estate 3,271,711 3,285,805 Cash 67,740 56,340 Notes receivable, net 48,253 34,520 Investment in unconsolidated joint ventures 21,766 19,369 Deferred commission expense 31,453 31,375 Escrow deposits, goodwill, and other assets, net 44,435 51,578 Total Assets $ $ 3,485,358 3,478,987 Liabilities and Equity Liabilities: Mortgage notes payable, net $ $ 1,855,028 1,891,900 Term loan 199,483 199,379 Unsecured lines of credit — — Accrued expenses and accounts payable 93,451 89,864 Deferred revenue – upfront payments from right-to-use contracts 83,580 81,484 Deferred revenue – right-to-use annual payments 12,559 9,817 Accrued interest payable 8,044 8,379 Rents and other customer payments received in advance and security deposits 88,543 76,906 Distributions payable 45,259 39,411 Total Liabilities 2,385,947 2,397,140 Equity: Stockholders’ Equity: Preferred stock, $0.01 par value, 9,945,539 shares authorized as of June 30, 2017 and December 31, 2016; none issued and — outstanding. — 6.75% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value, 54,461 shares authorized and 54,458 issued and outstanding as of June 30, 2017 and December 31, 2016 at liquidation value 136,144 136,144 Common stock, $0.01 par value, 200,000,000 shares authorized as of June 30, 2017 and December 31, 2016; 87,004,507 and 85,529,386 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively 868 854 Paid-in capital 1,121,307 1,103,048 Distributions in excess of accumulated earnings (219,641) (231,276) Accumulated other comprehensive loss/(income) 30 (227) Total Stockholders’ Equity 1,038,708 1,008,543 Non-controlling interests – Common OP Units 60,703 73,304 Total Equity 1,099,411 1,081,847 Total Liabilities and Equity $ $ 3,485,358 3,478,987 The accompanying notes are an integral part of these Consolidated Financial Statements. 3

Equity LifeStyle Properties, Inc. Consolidated Statements of Income and Comprehensive Income For the Quarters Ended and Six Months Ended June 30, 2017 and 2016 (amounts in thousands, except per share data) (unaudited) Quarters Ended Six Months Ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Revenues: Community base rental income $ $ $ $ 121,964 115,385 242,656 229,461 Rental home income 3,632 3,543 7,237 7,088 Resort base rental income 50,055 44,732 111,123 100,166 Right-to-use annual payments 11,350 11,187 22,602 22,241 Right-to-use contracts current period, gross 3,798 3,086 7,004 5,618 Right-to-use contract upfront payments, deferred, net (1,321) (798) (2,096) (1,100) Utility and other income 20,650 19,523 42,776 40,316 Gross revenues from home sales 7,833 9,130 14,860 17,344 Brokered resale revenues and ancillary services revenues, net 444 398 2,105 1,816 Interest income 1,798 1,625 3,568 3,285 Income from other investments, net 1,109 2,270 1,866 3,993 Total revenues 221,312 210,081 453,701 430,228 Expenses: Property operating and maintenance 72,901 66,647 140,955 129,601 Rental home operating and maintenance 1,657 1,581 3,208 3,106 Real estate taxes 13,943 12,869 27,980 26,067 Sales and marketing, gross 2,894 2,931 5,584 5,424 Right-to-use contract commissions, deferred, net (112) (116) (196) (12) Property management 13,023 12,044 25,583 23,807 Depreciation on real estate assets and rental homes 30,247 29,029 60,357 57,684 Amortization of in-place leases 958 428 1,990 763 Cost of home sales 7,895 9,481 15,014 17,762 Home selling expenses 929 805 1,854 1,639 General and administrative 8,461 8,255 15,834 15,663 Property rights initiatives and other, net 271 527 490 1,181 Interest and related amortization 24,822 25,561 49,701 51,195 Total expenses 177,889 170,042 348,354 333,880 Income before equity in income of unconsolidated joint ventures 43,423 40,039 105,347 96,348 Equity in income of unconsolidated joint ventures 1,040 765 2,190 1,646 Consolidated net income 44,463 40,804 107,537 97,994 Income allocated to non-controlling interests – Common OP Units (2,649) (2,998) (6,539) (7,308) (2,316) (2,316) (4,613) Series C Redeemable Perpetual Preferred Stock Dividends (4,613) Net income available for Common Stockholders $ $ 39,498 35,490 $ 96,385 $ 86,073 Consolidated net income $ $ $ $ 44,463 40,804 107,537 97,994 Other comprehensive income (loss) (“OCI”): Adjustment for fair market value of swap (36) 30 257 (644) Consolidated comprehensive income 44,493 40,768 107,794 97,350 Comprehensive income allocated to non-controlling interests – Common OP Units (2,651) (2,995) (6,555) (7,257) (2,316) (2,316) (4,613) Series C Redeemable Perpetual Preferred Stock Dividends (4,613) Comprehensive income attributable to Common Stockholders $ $ 39,526 35,457 $ 96,626 $ 85,480 The accompanying notes are an integral part of these Consolidated Financial Statements. 4